Property market sentiment softens

Supply of homes, vacancy rates up, but buyers discouraged by high prices

THE lacklustre property market seen in the first quarter of this year is likely to persist, with developers expected to launch more projects in the months ahead, increasing the supply of new homes even as buyers stay away.

The prices of homes in both the private and public sectors rose at a much slower pace in the first quarter while the volume of transactions remained thin.

Private home prices rose 3.7 per cent in the first quarter, according to the Urban Redevelopment Authority (URA), lower than its earlier estimate of 4.2 per cent and well below the 6.8-per-cent rise in the previous quarter.

Developers sold 762 private residential units in the quarter, the lowest number of transactions since Sars-stricken 2003.

The URA data released on Friday for the full three months were an update from its April 1 estimates, which were based on transactions in the first 10 weeks of the quarter.

“This is quite a marked difference and it shows that in the last two weeks of the quarter, there has been some evidence of price cutting in the market,” said Mr Donald Han, managing director of real estate firm Cushman and Wakefield.

The vacancy rate for completed private residential units rose 6.3 per cent, up from 5.6 per cent in the previous quarter, the URA data showed. With more supply in the market, there is added pressure to reduce prices.

“If the vacancies continue rising at this rate, the market will definitely turn this year. Prices will peak for sure,” said Mr Colin Tan, head of consultancy and research at Chesterton International.

Among the projects to be launched in the coming months are the Marina Bay Suites and Duchess Royale on Duchess Avenue. They add on to developments such as The Verte at Telok Kurau and Waterfront Waves at Bedok Reservoir Road that were launched in the first quarter.

Foreigners — who have been a key catalyst in the 30-per-cent jump in private home prices last year — are increasingly being discouraged by high asking prices.

This is especially so amid the continued uncertainty over the United States economy and the fallout from the sub-prime mortgage crisis.

Kuwait Finance House, which last December took an option to buy 97 units of the luxurious Goodwood Residence condominium for $818 million from Guocoland, has decided not to go through with the purchase.

The lacklustre real estate market in Singapore and the region has affected the performance of listed property firms.

Keppel Land reported a 7.6-per-cent fall in property sales to $273.1 million in the first three months of the year due to the increasingly cautious sentiment.

Mr Ku Swee Yong, a director at property consultancy Savills, said that until global stock markets show clear signs of a recovery, investors would remain wary of putting their money in real estate. He noted that banks here had not been selling many home loans this year.

“Other parts of consumer expenditure are still going strong, it’s just that property is taking the brunt of it,” said Mr Ku.

For the office sector, rentals increased at a slower rate of 7.3 per cent, down from 10.9 per cent in the previous quarter.

The URA said there was a total supply of 16 million sq ft in gross floor area of office space at the end of the first quarter.

Since last July, the Government has made available land on short-term leases for transitional office sites to meet the high demand for such space.

Mr Han said that the pace of office rental increase would continue to moderate for the rest of the year.

Mr Nicholas Mak, a director from Knight Frank, said that despite this moderation in pace, rentals will still rise by 15 to 20 per cent this year as “demand for office space is still healthy”.

Resale transactions for HDB flats down down 6%

The public housing market is also showing nascent signs of waning.

The number of resale transactions of Housing and Development Board (HDB)flats fell 6 per cent to 6,360 in the first quarter of the year from 6,750 in the previous quarter. Meanwhile, the HDB Resale Price Index rose 3.7 per cent from the previous quarter, down from 5.7 per cent in the fourth quarter of last year.

“HDB flat buyers were resisting the rise in resale prices,” said assistant vice-president of property agency ERA Eugene Lim.

The median cash-over-valuation (COV) for resale transactions was $21,000 in the first quarter, slightly lower than the previous quarter’s $22,000. The COV is the difference between the actual transacted price of the flat and its valuation. It cannot be paid from a loan or from savings in the Central Provident Fund.

“We saw the resale market hitting resistance level in the fourth quarter last year as HDB flat buyers do not have or are not willing to part with so much cash. This resistance carried through to the first quarter,” said Mr Lim.

“Very often, the deal cannot be closed or takes much longer to close because of unrealistic sellers demanding high COV,” he added.

Also, with more new flats coming on stream, some demand will be removed from the resale market. Buyers who can afford to wait up to three years for the completion of the flats may prefer to buy new flats directly from the HDB as this often involves a very small or no immediate cash outlay.

Source : Today – 26 Apr 2008

Marina Bay Suites: sweet interest in these suites

Sales previews for Marina Bay luxury condo to start end of this monthDESPITE worries of a global slowdown and a decline in sales of private property these few months, developers of the Marina Bay Suites are confident they will be able to attract enough buyers for this luxury condominium.

Sales previews for these 221 units will start by the end of the month, and marketing agents said they have seen substantial international interest, as well as interest from earlier buyers of the sister residential development, Marina Bay Residences.

“We believe that currently, the market is strong enough,” said Marina Bay Financial Centre (MBFC) head of residential marketing Kan Kum Wah, who added that while last year was exceptionally good for the residential property market, he expects demand from buyers to continue this year.

While prices for the units in the 66-storey development have not been fixed, Mr Kan said people could get some indication from current market transactions of around $3,000 per square foot (psf).

This translates to at least $4.8 million per unit, which ranges from $1,600 to $2,700 psf.

Marketing agents DTZ Debenham Tie Leung and CB Richard Ellis, which have done pre-marketing visits to Shanghai, Dubai, Jakarta and Hong Kong, said there is significant interest from international buyers.

Between 40 and 60 per cent of the buyers for the luxury residential property segment in Singapore are usually from overseas, said Ms Ong Choon Fah, executive director and regional head of consulting and research at DTZ. Forty per cent of the buyers of Marina Bay Residences were from overseas.

Mr Donald Han, managing director of property consultancy Cushman and Wakefield, agrees that these prices are reflective of the rates in that area, but the developers “might offer a lower price for early birds”.

“I’ve got no doubt that the project is able to sell well,” he said.

The Marina Bay Suites, located at the bayside near One Raffles Quay, will feature 218
three- and four-bedroom apartments, and three penthouse units. There is a significant demand for big units, explained Mr Kan, who received feedback from buyers about the earlier development that offered one to-four bedroom apartments.

This project, which is a joint venture between three developers, Cheung Kong/Hutchison Whampoa, Hongkong Land and Keppel Land, will appeal to a distinct group of internationally-well-travelled buyers, said Mr Kan. He noted that this is the last call for buyers interested in owning an apartment directly fronting Marina Bay.

But he added that this is not the last chance for buyers who are interested in having an address in this “new downtown”.

While this residential property may be the last few available in the necklace of developments at Marina Bay, said Mr Han, “the government still holds a fair bit of undeveloped and unreleased URA sales of sites in that area”.

The Urban Redevelopment Authority (URA) is setting aside 60 hectares of land at Marina South for a landmark residential district.

URA said last September that some 11,000 housing units have been planned.

Source : Today – 17 Jan 2008

Marina Bay Suites @ Marina Bay

Set in the heart of the US$30 billion Marina bay, Asia’s most exciting urban lifestyle hub, the 66- storey, 239-metre tall Marina Bay Suites sets new standards for exquisite luxury living in Marina Bay Fortunate residents will enjoy dynamic city skyline vistas and exclusive views of the elegant Central Linear park.

An oasis of peace and tranquility in the heart of the new Downtown, the Central Linear park will serve as a ceremonial green focal point for the entire area. Wake up to the soothing greenery of the park and the cool breezes from the sparkling blue water of Marina Bay.

Marina Bay Suites residents will also enjoy superb road and rail connections and easy access to the airport and the rest of Singapore. With direct road links to East Coast Parkway and the upcoming US$1.65 billion Marina Coastal Expressway, the international air link hub of Changi Airport is less than 18 minutes away. Residents will also have convenient access to Raffles Place and the rest of the Island via future MRT station.

Location : Marina Boulevard
District : 01
Tenure : 99yrs Leasehold (w.e.f 8 March 2007)
Expected Completion : 31 Aug 2012
Total Units : 221 in one block of 66 storeys

Unit Types :
Type A 4 Bedroom ~ 55 units (2680 to 2691sqft)
Type B 4 Bedroom ~ 55 units (2045 to 2067sqft)
Type C 3 Bedroom ~ 54 units (1572 to 1604sqft)
Type D 3 Bedroom ~ 54 units (1615 to 1625sqft)
Type P Penthouse~ 3 units (4682 to 8181sqft)

Nearby Amenities : Walking distance to CBD- Raffles Place, Garden by The Bay, Singapore Flyer, Bayfront Bridge, Marina Barrage, Marina Bay Sands Integrated Resort, Bussiness Financial Centre, Grand Prix Racing, Esplanade Theatres on The Bay.

Contact us at info@lushhomemedia.com or +65 9631 8037 for more information.

Marina Bay Suites drums up global interest

The strong capital growth trend in the Singapore luxury residential property market will be powerful motivation for a new generation of non-institutional Middle Eastern investors to increase their stake in Singapore, revealed the developers of the Marina Bay Financial Centre (MBFC) at the recent Cityscape Dubai exhibition.

Non-landed property values in the core central area appreciated by 23.3% in the first nine months of 2007 following a 17% gain in 2006, according to the Urban Redevelopment Authority (URA).

Kan Kum Wah, Head of Residential Marketing for MBFC, said that while the Middle East presence in the Singapore property market had so far been led by institutions, the conditions are now right for the emergence of a new wave of individual buyers.

“As more individual investors from the Middle East learn about the potential of the Singapore market, through their work in the thriving banking and financial sector, or as part of the boom in Middle East visitors to Singapore, this creates the potential for a new category of individual Middle Eastern buyers,” Kan said.

Annual trade between the two geographies spiked by almost 50% in just two years to reach US$31 billion in 2006, according to the Economic Development Board, while the number of Middle Eastern visitors to Singapore rose 16% in 2006 according to the Singapore Tourism Board.

“Growing trade and investment is creating more reasons for Middle Eastern property buyers to invest in Singapore as well as introducing them to the capital growth and income opportunities in the Singapore residential property market, where there are very few restrictions for international buyers in the condominium market,” Kan said.

The developers of the MBFC also revealed their plans for Marina Bay Suites, a 65-storey residential tower slated for launch early next year. Like the MBFC and the sold-out Marina Bay Residences, Marina Bay Suites is a joint venture by three of Asia’s largest property developers: Cheung Kong (Holdings)/Hutchison Whampoa, Hongkong Land and Keppel Land.

“Marina Bay Suites will be a fitting, even more upscale, sister development to the 428-unit Marina Bay Residences, which sold out in just three days last December, affirming strong confidence in the MBFC,” Kan said. “Marina Bay Suites presents the last opportunity to buy luxury residences within this world-class development.”

Marina Bay Suites will offer just 223 three and four-bedroom apartments ranging from 1,500sqft-2,600sqft featuring private lift lobbies. The typical floor plate has only four apartments, while the solitary single-level penthouse and two duplex penthouses in the complex each boast their own swimming pool.

“Marina Bay Suites will offer a commanding bay-view location and will anchor one side of the new Central Linear Park, a landmark feature of Singapore’s new downtown under development at Marina Bay,” Kan said.

“With its proximity to such a variety of lifestyle options within the MBFC, Marina Bay Sands, Esplanade Theatres on the Bay, Gardens by the Bay and even Formula One racing, the new downtown is taking shape as Singapore’s most glamorous business and entertainment district.”

Outdoor and entertaining areas at the podium level of the Marina Bay Suites will include semi-outdoor spa lounges and a 50-metre lap pool, while Sky Lounges located at levels 27 and 46 offer Sky Cabanas, yoga and massage terraces set amid water features.

The distinctive design of the Marina Bay Suites reflects the hand of New York-based architects Kohn Pederson Fox (KPF). KPF has master-planned the S$4 billion MBFC development to create a ‘work, live and play’ environment for 50,000 urbanites expected to work in the precinct following completion of the MBFC in 2012.

Following strong interest from buyers last year, when almost 40% of the Marina Bay Residences were sold to international buyers, the joint venture has been showcasing the MBFC and promoting Marina Bay at key regional events such as luxury property shows in Hong Kong, Shanghai and Dubai.

“We’re experiencing a keen appetite from investors confident in Singapore and interested in the live-work-play destination of Marina Bay,” Kan said. “We anticipate that there will be strong international interest when we commence marketing of Marina Bay Suites early next year.”

Source : Property Report Singapore-Malysia-Indonesia – November 2007 

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